PSS Death and Invalidity Benefits
Public Sector Superannuation (PSS) members get Death and Invalidity Benefits automatically and may be eligible to apply for insurance cover.
Benefits and cover
What’s available to Public Sector Superannuation (PSS) members:
- Death and Invalidity Benefits—received automatically, at no extra cost to the member.
- Additional Death and Invalidity Cover (ADIC)—PSS members can optimise their super benefits by applying for extra cover. If approved, their employer will pay half of the standard risk premium.
- Income Protection, and Death and TPD insurance—if your client becomes a PSSap Ancillary member, they can apply for Income Protection and Death and TPD insurance through lifePLUS choice.
Eligible PSS members automatically get Death and Invalidity Benefits at no cost.
Who's eligible?
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Contributing members
Death and Invalidity Benefits if the customer is under 60.
Benefit payable through this cover is based on the lump sum the customer would receive if they worked until they are 60 (for full benefits customers).
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Preserved members
Eligible for Death and Invalidity Benefits, the Invalidity Benefit amount is based on the value of the member's PSS benefit at the date of a claim.
PSS members are assigned a benefit classification
If the member has re-joined PSS, we'll ask them to complete a Confidential medical and personal statement within 14 days of re-joining. We may also ask them to undertake a medical assessment.
We'll use this information to assess how likely it'll be that they can work without excessive sick leave or PSS claims within the first three years of re-joining PSS. After the assessment, they'll be classified as either:
- a full benefits member; or
- a limited benefits member.
Full vs limited benefits
If the member is a contributing member and we approve their claim for Permanent Invalidity:
- full benefits members will receive a benefit that takes into account their prospective years of service to age 60; or
- limited benefits members will receive a benefit that is calculated to the date they stopped working.
Death Benefit
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How much is payable?
Death Benefits are calculated on the percentage of the pension the member would've been paid if they retired on invalidity grounds.
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Who receives Death Benefits?
Benefits are payable to the eligible spouse and/or children if the member dies:
- when the member is a contributing or a preserved member; or
- after the member retires, if they were receiving a PSS pension.
If they die, and they are a:
- full benefits member, their dependants can choose to take the benefit as a pension, a lump sum or a combination of both; or
- limited benefits member, their dependants will receive a lump sum based on the benefit accrued up to the date they die. A pension is not payable.
For detailed information and examples of Death Benefit calculations, download the member factsheet: Death and Invalidity Benefits booklet.
Invalidity Benefit
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Invalidity retirement benefits vs Partial invalidity
Invalidity retirement benefits support PSS members if they are retired on invalidity grounds by their employer and the CSC claim is approved.
As a general rule, to be approved for Invalidity retirement the member must be unlikely to work again in an occupation they're reasonably qualified by education, training or experience to perform, because of a physical or mental condition.
A partial invalidity pension is a form of income maintenance. We pay this benefit if, through the claims process, we decide that the member's salary is permanently decreased because a medical condition causes them to be downgraded or to work reduced hours.
We also pay it if they're retired on medical grounds and then returned to work with a PSS participating employer for a salary that is lower than what they were paid when they first retired on medical grounds.
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How we pay benefits
Invalidity Benefits as a pension or as a combination of a pension and a lump sum based on the member's choice.
Benefits may also be entitled to receive pre-assessment payments while they wait for our decision. Pre-assessment payments are in place to give them some income after their sick leave runs out, while they wait for us to assess their application.
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Faster access if they're terminally ill
We will take steps to process applications for invalidity retirement with extra speed if the member is terminally ill.
Additional Death and Invalidity Cover (ADIC) is extra cover members can apply for on top of the Death and Invalidity cover they received when they joined or re-joined PSS.
It's available to members at competitive rates and their employer will pay half of the standard risk premium.
Top up with ADIC
ADIC can help to 'fill the gap' between current Accrued Benefit Multiple (ABM) and the maximum amount payable from PSS. This may suit, for example, members who joined or re-joined PSS later in life and have a short prospective service career before turning 60.
Taking out this extra cover is a bit like buying an additional ABM—but one that's only used if the member dies or retires due to Invalidity.
Who can apply?
If the member is contributing to PSS and under 60, they can apply for ADIC.
If they're a casual employee, if they have many PSS accounts or if they've transferred in from CSS, they may still be eligible to apply for cover. But will need to call us first to discuss their options on 1300 000 377.
How to apply
Members can request a quote and apply online by logging in to CSC Navigator and using LIFEapp—it takes about 20 minutes.
More info on claiming can be found on the member page, PSS death and invalidity benefits.
Who pays for cover?
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The member's employer pays half of the standard risk premium…
If the insurer assess the client as:
- A standard risk, that is, they’re deemed to be of good health and don’t engage in hazardous pursuits, their employer will pay 50% of their standard ADIC premiums.
- A non-standard risk, their employer pays half the cost of a standard risk premium.
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…and the member pays the rest
The member will need to pay the remaining 50% of the standard premiums. If they are assessed as a non-standard risk, they’ll also pay for any additional premium loadings that may apply. We’ll deduct their portion of the insurance fees and costs directly from their pay each fortnight.
If they take unpaid leave, they’ll need to pay the whole premium amount for that period of leave.
Insurance payments and contribution caps
The amount paid by the employer counts towards the member's concessional (before-tax) contribution cap. The amount the member pays counts towards their non-concessional (after-tax) contribution cap.
How much does ADIC cost?
ADIC premiums are based on the member's age and the amount of cover they’re eligible for. You can find more information about the cost of cover in the member booklet – Death and invalidity benefits.
We’ll let the member know their premium when they’re first approved for ADIC.
Worked example
Here’s an example of how to work out the fortnightly insurance cover costs for a 50 year old.
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The member’s average salary is |
$80000 |
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Their maximum multiple is |
1.10 x average salary |
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The amount of cover available to them is |
$80,000 x 1.10 = $88,000 |
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The premium for a 50 year old is |
$3.57 per $1,000 cover |
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Their annual premium is |
$3.57 x 88 = $314.16 (where 88 = $88,000 / $1,000) |
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Their fortnightly premium is |
$12.08 ($314.16 / 26) |
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The customer’s share of the fortnightly premium is |
$6.04 per fortnight |
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The employer’s share of the fortnightly premium is |
$6.04 per fortnight |
When cover may change
ADIC takes into account salary increases and changes to contributions. This means the cover amount may change after each birthday, after the member's salary review is completed. This may also change the premium.
The cover and premiums will change when the average of the member's last three super salaries (also called your final average salary) changes. If the cover benefit and premiums change, we’ll let the member and their employer know.
How we pay ADIC benefits
If the member stops working because of invalidity and they have an approved claim, ADIC cover will make up a portion of their overall pension. And if they retire because of a terminal illness, they can receive the payment as a lump sum.
If they die, their eligible spouse can take the benefit as a lump sum or a pension. If they don’t have dependants, the benefit is paid to their estate as a lump sum.
Like any insurance policy, there are exclusions and restrictions, including when we can’t pay claims. For more details download the member booklet – Death and invalidity benefits.
PSS members can apply for lifePLUS choice Income Protection Cover, and Death and TPD cover (which includes Terminal Illness cover) at rates that are generally not available outside of super.
This means members can tailor their insurance to fit their lifestyle and financial needs.
lifePLUS choice works with other PSS cover
Benefits paid through lifePLUS choice cover are on top of amounts received through a PSS Death and Invalidity claim, and this applies if they have ADIC or if they don't.
Who can apply and how?
- Members with a personal accumulation account through PSSap to apply for lifePLUS choice; and
- are aged under 67 can apply for Income Protection cover and under 70 can apply for Death and TPD cover.
To open a personal accumulation account with PSSap, a member must have been employed by an eligible employer for at least 12 continuous months and be a:
- current contributing or preserved PSS member; or
- be a former PSS member who was contributing at any time on or after 7 March 2021.
When members join PSSap, they'll get another account, which works alongside their PSS account and allows them to apply for lifePLUS choice. For more information:
- Visit PSSap personal accumulation(member link);
- Head to lifePLUS choice(member link); or
- Read the Insurance and your PSSap super booklet.
Before making any decisions the member should read the PSSap PDS and Target Market Determination.